I know of a company which wanted to launch an event in a crowded market. Now of course to have a successful show you need to have attendees and visitors. For a profitable show however, you also need to have enough sponsor and exhibitor revenue, ie exhibitors on the floor. This is because the revenue you get from an exhibitor is many times more than a single attendee. So therefore to make money on a show, you need to be able to sell exhibitors.
In launching a show, you need to have a good idea which of the companies in the market will sign up for your show and for roughly how much they will pay, so that you can make an educated guess as to whether will at least break even in year one, given your expected costs.
In a crowded market, no exhibitor is looking for another show to do just because one pops up. They don’t have extra budget just because you came along. Therefore, in launching a show you have to take exhibitors from your current competition, and enough of them not to ‘take a bath’ on the show and lose money.
How do you do this? Well if you have done your research before you launch and you can get the major companies in the market to take your call, then you might find out which of your competitors have good exhibitor relationships and which competitors are weak in this area, in addition to how all of the competitive events are faring.
It’s my opinion that if you want to launch a new show, you have to do what it takes to kill a competitor (of course take actions which are legal, moral and ethical). This usually means you need to know you can get the audience (read decision makers) and that you can make the money after all the bills are paid. I like to make at least a 25% margin in the first year of a show, so it means that I need to sharpen my pencil to make sure a client really has the grit the resources and knowledge to kill a competitor.
The reaction to your new event entry by your market competitors is to try and kill you before you can get traction. The battle is therefore where the money is, so you have to make every effort to get enough of the top companies on your side as quickly as possible.
Back to the company I mentioned, although they did some amount of pre-launch homework and successfully started the show and made a 21% margin in year one. However, their interest, attention and care of their main sponsors waned as years went by-in other words they took the customers for granted. The exhibitor revenue sank in year four leading to a loss and end of the show. A huge waste, considering the effort expended.
The lesson? Make sure you know your exhibitors intimately and establish a solid bond with all of your major ones (listen and act upon their feedback!), so you don’t have your own show killed by a competitor, new or old.